Life Insurance Claim Denial
When you take out life insurance, you expect it to help ease the financial blow a death could take on your family's finances. You may have life insurance to pay for your funeral, or to provide money to your spouse or children when you are gone. Sometimes, however, a life insurance company may deny their life insurance claim. There are several reasons a life insurance company may deny a claim, and perhaps, ways to fight the claim.
Common reasons why a life insurance claim is denied
When someone dies and their life insurance beneficiary makes a claim, the life insurance company will often review the policy and claim to make sure the claim is payable. Often, they may look for reasons to NOT pay your life insurance benefits to your chosen beneficiary. Some common reasons for a life insurance claim denial:
- Material Misrepresentation - This is where the insurance company looks back to the insurance policy application, then compares the responses with the medical records it obtained or background on the insured. If they find any discrepancy, they could try to argue that the policy owner misrepresented statements on the application which were material to their decision of write the life insurance policy. However, some policy applications have low standards which require the insurance company to prove that it was more than a misstatement. Sometimes, an insured may not have been diagnosed with a particular disease until after the application was submitted. There are many arguments to beat the insurance company and still get some benefits if the case was denied for material misrepresentation.
- Non-Payment of Premiums - A policy may be denied if it was previously cancelled because the insurance company didn't get the premiums on time. Sometimes, the check was mailed or auto-debit was in place, but the insurance company didn't compute the payment receipts properly or claimed they didn't get them. These claims could still be payable.
- Claim Dispute - When two or more people make a claim to the same life insurance benefit, the life insurance company gets put in a tough position. Even if they believe one of the claimants is correct, they risk double payments if they are wrong. To avoid having to pay twice, a life insurance company may file an interpleader complaint against all possible beneficiaries. If you are sued by the life insurance company, you may have a very limited period of time to respond to the lawsuit or you could default. A life insurance attorney with experience handling interpleader lawsuits and life insurance claim disputes should best be able to litigate the case.
- Policy Exclusion - A life insurance policy may have exclusions for when the policy would not pay out. If the death falls within an exclusion, the claim could be denied. However, sometimes the policy language may be vague or ambiguous, or the question of how the death occurred may not be so clear as to whether the exclusion applies.
- Former Spouse - Some states now have laws which treat a former spouse as having predeceased their ex for life insurance purposes. There are exceptions to this law, which makes disputes all the more common.
- Slayer Statute - Many states have laws which forbid someone who intentionally and unlawfully kills another from benefitting from their life insurance proceeds. If someone killed another and was the listed beneficiary on the decedent's life insurance policy, they could be skipped over and the benefits would go to the contingent beneficiary.
- Estate Claim - When all beneficiaries on a life insurance policy either died before the insured or are not entitled to collect because of an agreement or law, the policy benefit often goes to the Estate of the person who died. Many people never need to open an estate after they die, but if there was life insurance available for the Estate, probate may be necessary. A life insurance attorney can work with the probate attorney to help process the life insurance claim and get the benefits into the Estate.
How can I collect life insurance benefits if the life insurance company denied my claim?
As a life insurance lawyer who has handled hundreds of disputed life insurance claims, Jason Turchin is always happy to give a free case review to see if you might still be entitled to collect benefits. We work on a contingency fee basis, which means it will not cost you any money out of pocket for us to review the case.
Call Life Insurance Lawyer Jason Turchin at 954-519-6210 for a free case evaluation.